Sustainable business models
By: Rubio Gonzalez
Business models today have been under strong pressure to transform into a sustainable business system. Therefore many of these models have been affected by internationalization along with the need to meet sustainable development goals which has made global competition between companies and traditional business models difficult to find adequate solutions.
These business models that have chosen to achieve these sustainability objectives have decided to take this alternative concept of sustainable business model because it has brought a competitive advantage to organizations by empowering traditional business models that meet sustainable development challenges while maintaining profitability and productivity.
It is important to know in detail how sustainable business models are applied in the different categories of innovation, energy, circular economy and mobility and transportation.
Innovation
Many researches have been carried out in the research fields and they focus on proposing models or guidelines to elaborate how to innovate a sustainable business model or how to transform a traditional business model into a sustainable one. One of the researchers known as "Evans" offers five aspects to take into account for this transformation to be effective.
Likewise, the "Value Triangle" is a new design framework proposed by Biloslavo, Bagnoli and Edgar which is a tool that allows an organization to capture the economic value of a system in which it co-creates and co-delivers through the collaboration of the company with its stakeholders. In other words, this value-added triangle is able to satisfy the benefits of customers, partners and suppliers, stakeholders, the environment, the future generation and the organization itself.
Joyce and Paquin have a rather interesting approach to designing this sustainable business by proposing a three-layered business model canvas in order to satisfy the economic, environmental and social benefits. These three layers explain how the value creation and delivery process satisfies the benefits to the organization, society and the environment.
Energy:
One of the main objectives of the sustainable business model is to reduce the harmful effect of different companies on the environment. Therefore, resource and energy management is of utmost importance in order to transform into a sustainable society.
Tah and Abanda show that the Internet of Things has presented many opportunities to reduce energy consumption and carbon emotions through the implementation of different concepts such as smart buildings and smart cities. On the other hand, Rossignoli and Lionzo provide evidence considering that a network induces its collaborators to broaden their definition of value and see the need to create value for both business and society. The links that network participants have create new approaches that allow them to capture value and help them address concerns with resource dependency, thus achieving sustainability goals.
Circular economy:
Circular economy can be considered a tool to implement and design a business model that is sustainable in different sectors, taking into account the response to currently unsustainable trajectories. Heyes, Sharmina, Mendoza, Gallego-Schmid and Azapagic applied a design for product-oriented companies, by shifting the focus to a user-centered eco-design, they design circular economy models giving more importance to customer satisfaction.
Mobility and transportation:
Urban transformation is one of the most important sustainability challenges is urban transformation, because this mobility sector has a great impact due to reducing carbon emissions. Recently, different business models have emerged, such as smart app-based ridesharing systems, the expansion of electric vehicles and bike sharing. All of these models have helped drive urban mobility towards sustainability.
Lyons provides theoretical data on smart urban mobility and considers that the terms smart and sustainable are quite related. He argues that for the development of smart cities, technological development is not enough because sustainable development is needed to achieve urban mobility. The main requirements to achieve the objectives in this type of mobility are the appreciation of people's lifestyles, constraints, needs, desires and behaviors, as well as business practices. In addition, it should also be known that ICT plays a vital role in supporting the way in which society connects and determines the attractiveness of mobility to the user and the direction of effectiveness.
Nowickaa states that the use of a cloud computing model in mobility promotes sustainable mobility, minimizes the negative impact on the environment and increases economic and social benefits.
Sustainable Business Model Examples:
Tesla: High-performance electric sports cars.
Innovation: high-performance electric vehicle with a two-passenger capacity and the ability to go from 0 to 100 km/h in 3.6 seconds. In addition, the vehicle can be fully charged in less than 4 hours using a standard 110V or 220V outlet.
Sustainability: For a 300-mile trip, the cost of energy consumed by the E-roadster is equivalent to 10% of the cost of driving a normal vehicle 300 miles. The vehicle can run perfectly well on renewable energy sources.
Results: An electric vehicle with an efficiency equivalent to that of any high-end sports car that can travel up to 244 miles on a full charge costing $5. Currently one of the most attractive companies in the market, it is in the top 50 most attractive companies in the world.
Toyota: Gas-electric hybrid vehicle
Innovation: The cost-saving goals of the "Prius" vehicle led engineers to develop a completely new car. Engineers designed a control system that allows you to optimize the use of both electric and gasoline engines. These vehicles have a real-time display to inform and engage drivers on the best way to drive your vehicle.
Sustainability: This company achieves twice the mileage compared to non-hybrid vehicles of similar size on the market. In addition, it captures electrical energy into electrical energy when braking, as well as reducing CO2 and NO2 emissions by a large percentage.
Result: Since 1997, Toyota has sold more than 1.7 million hybrid cars, which means it has reduced 9 million CO2 emissions.
Zipcar: Vehicle sharing for city dwellers.
It is vital to reduce the number of vehicles in cities through a vehicle service that is always available and adapted to the transportation needs of city dwellers.
Innovation: In as little as 30 minutes offer a vehicle as Zipcar service and trucks in specific urban areas. The rental rate includes all maintenance and gasoline costs allowing this service to be convenient and reliable.
Sustainability: Zipcars allow the inhabitants of this society to share vehicles, over time they have increased the utilization of each vehicle. Customers plan and combine multiple trips resulting in reduced fuel consumption and emissions.
Results: Zipcar is the largest car sharing company in the world. 2 million people live within a 5-minute walk of a Zipcar. With this project, 50,000 vehicles have been reduced from the roads.
The process of building sustainable business models integrates an innovative part of business strategy. Different industries and business types have used sustainable business models to meet their economic, environmental and social objectives. In this article we presented some of the various areas to apply sustainable business models, it is also of great importance to take into account the research path in order to be able to use the different types of business in different industries. In addition through the examples we could see all the advances that have been made both in research and in the practice of sustainable business models around the world.
Author:
Rubio Nicolas Gonzalez
Junior Consultant
Nosratabadi, Saeed, et al. “Sustainable Business Models: A Review.” ArXiv.org, 23 July 2019, arxiv.org/abs/1907.10052.
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